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Silverlake Axis posts 8% lower EBITDA of RM66.9 mil; secures digital innovation enhancement contracts worth RM70 mil

Felicia Tan
Felicia Tan11/13/2020 08:13 PM GMT+08  • 3 min read
Silverlake Axis posts 8% lower EBITDA of RM66.9 mil; secures digital innovation enhancement contracts worth RM70 mil
This brings basic and diluted earnings per share (EPS) to 1.27 sen, 29% from the 1.78 sen reported for the 1QFY2020.
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Mainboard-listed Silverlake Axis has posted earnings before interest, taxes, depreciation, and amortization (EBITDA) of RM66.9 million ($21.8 million) for the 1QFY2021 ended Sept 30, some 8% lower than EBITDA of RM72.6 million a year ago.

This brings basic and diluted earnings per share (EPS) to 1.27 sen, 29% from the 1.78 sen reported for the 1QFY2020.

1QFY2021 group revenue and gross profit fell 10% and 13% y-o-y to RM148.2 million and RM91.6 million respectively.

The lower figures were attributable to lower contributions across all revenue segments with the exception of maintenance and enhancement services.

The group says large ticket size projects and deals have been deferred due to the ongoing Covid-19 pandemic.

Recurring revenue segments of maintenance, enhancement services and Software-as-a-Service recorded marginal growth from RM122.3 million to RM122.5 million for the quarter.

The recurring segments remained a “key revenue driver” for the group and contributed some 83% to group revenue during the quarter.


See: CGS-CIMB upgrades Silverlake Axis to 'add' on potential recovery in earnings for FY21

Project related revenue comprising software licensing and software project services declined 35% to RM25.2 million as key projects closed in previous years are currently nearing completion, which led to lower progressive revenue being recognised.

Sale of software and hardware products recorded lower revenue in 1QFY2021 due to the one-off sizeable contract delivered in 1QFY2020.

Revenue from Software-as-a-Service insurance processing of RM8.8 million stood 9% lower y-o-y mainly due to lower claims processing activities.

Other income of RM5.8 million was RM4.0 million higher than the previous year due to the government subsidies received from Latvia, Singapore and Malaysia as well as Hong Kong.

Total expenses for the quarter were 7% lower y-o-y mainly due to cost rationalisation activities.as well as lower foreign exchange losses.

In its outlook statement, the group says it expects to see “improvements” in the second half of the financial year amid the uncertainties arising from the Covid-19 pandemic.

“The pandemic has caused deep structural changes in the industry. The drive towards digital, regulatory demands and cost efficiencies are forcing the industry to innovate and renovate their IT infrastructure. Our investment in MÖBIUS has positioned us to take advantage of these changes,” it says in a statement via SGX.

“Core banking is the foundation of infrastructure and we have launched our next generation core banking platform MÖBIUS in August 2020 and we believe MÖBIUS will help future proof the investment of our customers against a fast-evolving technology landscape,” it adds.

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In a separate statement, Silverlake Axis says it has won contracts to deliver innovative and transformative digital innovation enhancement solutions to 17 of its existing customers during the 1QFY2021.

The contracts, which are signed with four large regional banking franchises in Asean, have a total value of about RM70 million.

The contracts are primarily for enhancements to existing core banking system and to enhance customers’ digital experience and are expected to be completed within 12 to 18 months from the dates of signing.

Shares in Silverlake Axis closed 0.5 cent higher or 2% up at 25.5 cents on Nov 13.

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